10-04-2023, 08:24 AM
What Does It Mean to Burn Crypto?
The concept of "burning" cryptocurrency refers to the permanent removal of a certain quantity of tokens from circulation. Typically, this process involves transferring the specified tokens to a burn address or a wallet from which retrieval is impossible. Commonly referred to as token destruction, this practice serves various purposes within the cryptocurrency ecosystem.
One primary reason for burning tokens is to decrease the total supply of a cryptocurrency. By doing so, a project initiates a deflationary mechanism, aiming to enhance the value of the remaining tokens. This strategy takes advantage of the economic principle that asset scarcity often leads to an increase in value, as observed when circulating supplies decrease.
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